PCM flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Ansoff matrix

Framework plotting products (existing/new) against markets (existing/new). Cells are market penetration, product development, market development and diversification; diversification carries the highest risk.

Porter's five forces

Industry attractiveness model covering rivalry among existing competitors, threat of new entrants, threat of substitutes, buyer bargaining power and supplier bargaining power. Stronger forces compress industry profitability.

BCG growth-share matrix

Portfolio tool using market growth rate and relative market share. Stars are high growth and high share, cash cows low growth and high share, question marks high growth and low share, dogs low on both.

SMART objectives

A test that objectives be specific, measurable, achievable, relevant and time-bound. A goal lacking a metric, a defined market or a deadline fails the test.

TAM, SAM and SOM

Three nested market sizes: total addressable market, serviceable available market within reach of the offer, and serviceable obtainable market realistically winnable in the planning period.

Relative market share

A firm's market share divided by the largest competitor's share. Values above 1 indicate leadership; the ratio is the BCG matrix's share axis.

Margin of error

The plus-or-minus band around a survey estimate at a stated confidence level. For a proportion at 95% confidence it is about 1.96 times the standard error.

Sample size for a proportion

n equals z-squared times p times (1-p) divided by error squared. At 95% confidence and 5% error the worst case, p equal to 0.5, needs about 384 respondents.

Correlation versus causation

Correlation quantifies linear association between two variables but cannot prove one causes the other; causation requires temporal order, control of confounders and preferably an experiment.

Net Promoter Score

Percentage of promoters (scores 9-10) minus percentage of detractors (scores 0-6) on the likelihood-to-recommend question. Passives scoring 7-8 are excluded from the calculation.

Statistical versus practical significance

A result can be statistically significant yet too small to matter commercially. Report effect size and confidence intervals, not only p-values, before recommending action.

Cost per acquisition

Total campaign or channel cost divided by the number of conversions or customers acquired. It is compared against customer value to judge channel viability.

Conjoint analysis

A survey method that asks respondents to choose among product profiles, then estimates part-worth utilities for each attribute level and reveals attribute importance and trade-offs.

Price elasticity of demand

Percentage change in quantity demanded divided by percentage change in price. Demand is elastic when the absolute value exceeds 1, so price cuts raise revenue.

Brand positioning statement

A template stating: for a target segment, the brand is the frame of reference that delivers a point of difference because of a reason to believe.

Line versus brand extension

A line extension adds a new variant inside the existing category under the same brand. A brand extension enters a different category using the established brand name.

Cannibalization

Lost sales of existing own-brand products caused by a new SKU or extension. Evaluation should count only incremental volume, not gross new-product sales.

Product life cycle

Four stages: introduction, growth, maturity and decline. Sales peak in maturity while profit typically peaks earlier, near the end of growth.

Reach and frequency

Reach is the number of unique people exposed; frequency is average exposures per person reached. Their product equals gross impressions for a fixed budget.

CPM and CPC

CPM is cost per thousand ad impressions; CPC is cost per click. CPM suits awareness buys, while CPC is used for performance-oriented search and display.

Last-click attribution

An attribution model giving full conversion credit to the final touchpoint. It undervalues upper-funnel awareness channels and overvalues closing channels such as branded search.

Search intent types

Four query intents: informational (learning), navigational (finding a site), commercial investigation (comparing options) and transactional (ready to buy). Content and bids should match intent.

Share of voice

A brand's advertising spend divided by total category advertising spend. Sustained share of voice above share of market is associated with subsequent share growth.

Email open and click rates

Open rate is opens divided by delivered emails; click-through rate is clicks divided by delivered. Click-to-open rate instead divides clicks by opens.

Consent-based marketing

Under regimes such as GDPR and ePrivacy, marketing contact requires a lawful basis, clear notice and an easy opt-out. Purchased lists without consent generally lack that basis.

Customer lifetime value

The margin a customer generates over the relationship, often estimated as average order value times purchase frequency times retention years times margin, optionally discounted per period.

Churn and retention rate

Churn rate is customers lost in a period divided by customers at the start. Retention rate equals one minus churn rate over the same period.

RFM segmentation

Behavioral segmentation on recency of last purchase, purchase frequency and monetary value. It needs only transaction data and prioritizes customers by likely responsiveness.

Pipeline coverage ratio

Open sales pipeline value divided by quota for the period. A common heuristic is three to four times coverage, adjusted for win rate and sales cycle length.

Distribution intensity

Three levels: intensive (maximum outlets, convenience goods), selective (chosen intermediaries, shopping goods) and exclusive (very limited outlets per territory, luxury or specialty goods).

Push versus pull promotion

Push incentives target channel members, such as trade allowances and sales spiffs. Pull incentives target end customers, such as consumer promotions and advertising, to drive demand through the channel.

Customer effort score

A single-item metric asking how much effort a customer had to expend to resolve an issue. Lower effort correlates with loyalty, especially in service recovery contexts.